Wednesday, April 30, 2008

Hillary Clinton and John McCain are both proposing that we take a vacation from reality this summer by temporarily lifting the 18.4 cents per gallon federal tax on gasoline. This, my friends, is worse than a bad idea. It's a typically, unambiguously, politically motivated and bad for the country, bad idea.

Removing the gas tax over the summer would accomlpish the following things. First, it would save the average american driver not more than $50. Over the entire summer. That's less than a pack of gum a day. Second, it would cost the federal government about $9 billion in lost revenue. $9 billion dollars is nearly 20% of the amount that we will generate by phasing out Bush's tax cuts to those making over $250 thousand dollars a year.

Of course, Clinton is also proposing a windfall profits tax on oil companies to make up the lost revenue. As Paul Krugman writes, this makes her plan "pointless rather than evil." I'd add though, that her plan is worse than pointless because by making gas cheaper (though of course, it won't actually be 18.4 cents cheaper, as the market will quickly accomodate and you'll be paying that money to the oil companies anyway) encourages driving and consumption when we should be doing the opposite. Does the term "greenhouse gas" ring any bells? Economistsallagree.

This is just another reason I'm proud to support Obama. Besides being the first candidate to propose cap and trade with 100% profits, he is resisting the siren song to political pandering that Clinton and McCain have succomb to. Clinton is even attacking Obama for not signing onto a horrible idea. Obama actually did support a state gas tax holiday in Illonois many years ago, and it ended up costing the stat $175 million dollars in revenue and didn't even achieve the desired savings to drivers. He apparently learned something from all those years of experience in the Illonois legislature that don't count as experience.

It's a no-good very-bad aweful idea. It's been more than a year since John McCain announced he's running for president, and he still has no energy policy.